Role of Bio-Fuels in the Indian Transport Sector

Regional Workshop Climate Change Mitigation in the

Transport Sector

Aditi DassWinrock International India

ADB, May 24-25, 2006

Winrock International India (WII) An independent, not for profit organization established

in 1998 Pursuing activities related to energy, environment,

natural resource management and sustainable development

Staffed by 60 professionals drawn from diverse disciplines

Affiliated to Winrock International, US

Ministries and Departments of Central and State Governments

Bilateral and Multilateral Agencies Foundations Corporate Sector

WII SPONSORSWII SPONSORS

Winrock International India Offices

New Delhi (Head Office)

Hyderabad, Andhra Pradesh (Project Office)

Bodhoi, Uttar Pradesh (Project Office)

Kavardha, Chattisgarh (Project Office)

Bangalore, Karnataka(Project Office)

Biofuel Options in India• Biodiesel - non-edible tree borne

(TBOs) seeds– Pongamia pinnata (Karanja) – Jatropha curcas (Ratan Jyot) – Azadirachta Indica (Neem)– Shorea robusta (Sal)

• Bioethanol – molasses: a byproduct of sugar industry

BiodieselBiodiesel

Government Actions on Biodiesel

Year Agency/ Body

Actions

2002 Government of India

Committee on Development of Biofuels (CDB) constituted within the Planning Commission

April 2003

Planning Commission

CDB recommended adoption of biofuels program - bio-diesel produced from oil bearing seeds of jatropha curcas as substitute for HSDPhase I - demonstration project 5 years

– jatropha cultivation in 0.4 mh especially in wastelands – State Forest Departments, under supervision of MoEF, State Departments of Rural Development, Panchayati Raj and Agriculture would be involved.

Phase II - self expansion of biodiesel program

Contd….

Government Actions on Biodiesel

Year Agency/ Body Actions

August 2003

Ministry of Rural Development (MoRD)

Identified as the nodal ministry. In addition, biodiesel development boards have been formed in various states

January 2005

MoRD DPR for the pilot phase (Jatropha plantations on 400,000 ha).

October 2005

Ministry of Petroleum and Natural Gas (MoPNG).

Bio-diesel purchase policy announced. •From 2006, oil companies to purchase biodiesel at Rs.25/litre for blending with diesel, through 20 purchase centres•The biodiesel should meet the norms set by the Bureau of Indian Standards•Extent of blending to increase from 5% to 20% in phases

State level policies and activities

Andhra Pradesh o Jatropha plantation on 40,000 acres during 2005-06o Free seedling material to Jatropha cultivation farmers o Grant to BPL (below poverty line) families to cover plantation cost o INR 9.85 million for R & D on biofuel o Reduction in value added tax (VAT) to the biodiesel industries

Uttaranchalo Uttaranchal Biofuel Board created to coordinate biofuel activities.o Plantation of Jatropha is being taken up on un-irrigated degraded forest-land

o Plantation during 2004-05: 360 Hao Plantation during 2005-06:10,000 Hao Plantation planned till 2012: 200,000 Ha

o State Government signed agreement with private company to process 600,000 tonnes of Jatropha seeds to bio-diesel

State level policies and activities

Chattisgarh• Biofuel development authority from 26th January, 2005 under the Chattisgarh Renewable Energy Development Agency• 80 million Jatropha seedlings planted during 2005 • Target for 2006 - 160 million Jatropha seedlings• Most of these plantations are on government wasteland and fallow land• Pilot demonstration plantation in 300 acres of land of farmers in each district.

KSRTC experience: use of pongamia oil in buses

• Trials of 10% oil blend in 2 new buses taken up in 2004 • Performance compared with 2 new diesel buses running

on same route.• Initial problems in achieving proper mixing of pongamia

oil with diesel solved by adding an enzyme-based additive • Cost of additive is INR 2200/litre and 1 litre of additive

added in 6000 litres of fuel.• 12.5% mileage improvement observed in comparison with

diesel buses• Slightly higher maintenance costs as fuel filters replaced

after every 8,000 km (10,000 km on diesel operation)• Current market price of pongamia oil is INR 28/litre

compared to price of diesel at INR 37/litre.• Overall saving of INR 3/litre by using blended diesel

Biodiesel Resources• Tree borne oil seeds• More than 300 different species of trees

producing oil-bearing seeds. Current utilization of non-edible oilseeds is very low

Oil source

Botanical name

Potential quantity (t/yr)

Current utilization (t/yr)

% ofutilization

Rice-bran

Oryza sativa

474,000 101,000 21

Sal Shorea robusta

720,000 23,000 3

Neem Melia azadirachta

400,000 20,000 5

Karanja Pongamia pinnata

135,000 81,000 6

Source: Subramanian et. al, 2005

Wasteland AvailabilitySource Area

(mha)Estimate/scientific

National Commission on Agriculture (NCA-1976)

175.00 E

Directorate of Economics and Statistics, Department of Agriculture and Cooperation

38.40 E

Ministry of Agriculture (1982) 175.00 E

Department of Environment and Forests (B.B. Vohra)

95.00 E

National Wasteland Development Board (Ministry of Environment and Forests, 1985)

123.00 E

National Bureau of Soil Survey and Land Use Planning, ICAR-1994

187.00 E

Society for Promotion of Wasteland Development (SPWD-1984)

129.58 E

National Remote Sensing Agency (NRSA-2000)

63.85 S

Diesel and Biodiesel DemandYear Diese

l DmdMMT

Bio-diesel (5%) MMT

Bio-diesel (10%)MMT

Bio-diesel (20%)MMT

2001-02

39.81 1.99 3.98 7.96

2006-07

52.33 2.62 5.23 10.47

2011-12

66.90 3.35 6.69 13.38

2020-21

111.92

5.60 11.20 22.38

2030-31

202.84

10.14 20.28 40.56

Potential vis-à-vis different yield levelsYield level (ton of seeds/ year )

Production (63.85 Mha)

1 13.77

2 27.54

3 41.31

4 55.08

5 68.9438 Mha of wasteland required for 20% blending by 2030 with yield of 5 tons/ha

Ethanol

Ethanol

Ethanol• Production from following sources

– Sugarcane - Major source of ethanol production in India. Average sugarcane productivity is about 70 MT per/ ha and ethanol productivity is 70 lt/ 1 MT of sugarcane.

– Sugar beet: Sugar beet cultivation and its processing to ethanol needs to be promoted in the country

– Starch (grain, corn etc) - Corn oil is edible and its use in India for production of ethanol is not economically feasible.

– Cellulosic biomass: currently, economics are not favourable.

Government Actions on Ethanol

Year Agency/ Body

Actions

1979 Ministry of Petroleum, Chemicals and Fertilisers

Constituted an interdepartmental committee to look at the opportunities for blending of alcohol with petrol

IIP, Dehradun

Trials were conducted on ethanol-petrol mix at three locations

2001 MoPNG Launched pilot projects to test the feasibility of doping petrol with 5% ethanol.

2002 MoPNG Allow the sale of 5% ethanol doping

2002 - 03

GOI surcharge @ Rs 6/lt on petrol compared to Rs. 5.25/ lt on ethanol doped petrol

2003 GOI E5 made mandatory in 9 states and 4 UTs AP, Gujarat, UP, TN, Karnataka, Mah, Punjab, Haryana, Goa, UT - Damman and Diu, Dadra and Nagar Haveli, Chandigarh, Pondicherry

(contd..)

Government Actions on Ethanol

Year

Agency/ Body

Actions

2004

Petroleum Ministry

Doping of ethanol made mandatory under following conditions:

1. Price of indigenous ethanol should be comparable to price of indigenous ethanol for alternative uses.

2. Delivery price of ethanol at the location should be comparable to the import parity price of petrol at that location

2. Indigenous delivery price of ethanol at a particular location is comparable to the IPP of petrol at that location.

2005

Indian Sugar Mills Association (ISMA)

ISMA were acting as nodal agencies for oil industry and sugar industry respectively.

Ethanol ProductionYear Ethanol

ProductionM lt

Potable UseM Lt

Industry UseM lt

Other useM lt

Surplus M lt

1999-00

1654.0 622.7 518.9 57.6 455.8

2001-02

1775.2 647.8 539.8 59.9 527.7

2003-04

1969.2 693.7 578.0 70.0 627.5

2006-07

2300.4 765.2 631.4 81.0 822.8

• gasoline dmd expected to increase from 7.9 MT to 16.4 MT in 2016-17• current availability of molasses and alcohol is adequate to meet this requirement after addressing the needs of chemical industry and potable sectors

Biofuel as Transportation Fuel

Markets for biofuels as transportation fuel

Biodiesel• Commercial biodiesel production is yet to start• Current usage is limited to trials on vehicles and lab

experiments • Current market price of biodiesel varies from INR 55 -

110/ lt• Cost of Jatropha biodiesel is high (INR 80-110/lt) as

Jatropha seeds are in high demand for raising new plantations

Bio-ethanol • During Mar 2003 to Sep 2004, 0.37 billion liters of

ethanol purchased by the oil industry as part of the 5% ethanol blending program

• During 2003-04, sugar cane production went down due to drought and ethanol producers were unable to meet demand of oil companies

• During 2003-05, ethanol prices increased from INR 15.50/l to INR 19.50/lt

Increase in the prices of petrol and diesel

(as of August 2005)

•Retail prices in Delhi

Date Price of Indian basket of crude (US$/ barrel)

Petrol* (INR/litre)

Diesel* (INR./litre)

01.04.2003

27.09 33.49 22.12

01.04.2004

31.86 33.70 21.74

01.04.2005

50.16 37.99 28.22

01.07.2005

54.23 40.49 28.45

01.08.2005

54.14 40.49 28.45

Petrol/Diesel price build up in Delhi

August 12, 2005Sl. No

Elements of pricing Value (Petrol) (INR)

Value (Diesel) (INR)

1 Ex-storage point price (from depots, terminals)

17.969 19.672

2 Freight and other charges, etc.

00.143 00.134

3 Sales Tax, Surcharge on ST, Excise Duty, Cess and other statutory levies

21.530 08.135

4 Dealer commission 00.848 00.509

5 Total retail selling price per litre

40.490 28.45053% of the prices of petrol and 28.50% of the prices of diesel are due to taxes, duties, cess, etc

Bio-fuel price

Ethanol INR 19.55/ lt molasses (INR 5,000/ ton in 2004), stabilize around INR

2,500/ ton during 2005 ethanol at around INR 19/ lt. alcohol beverage manufacturers (40-45% of molasses), are

shifting towards grain-based alcohol

Biodiesel INR 55-110/ lt, artificially high prices expected to come down as harvest from the new

plantations would become available projected prices of biodiesel in various studies ranges from

INR 16 – 50/ lt.

Food Security• Food grain production increased from average of

187 MT during Five Year Plan Period (1992-97) to 202 MT per annum during IX Plan period (1997 – 2002), although average area under food grain production had remained constant at around 122 mha

• Increase food production by over 50% in the next two decades

• Appx. 56% is arable land, used only for about 3 months during the monsoon period. Adequate energy for irrigation, enable production of current levels of food grains, fruits and vegetables from a smaller area by multiple cropping

contd …

Issues/ Concerns

Energy• About 125,000 villages in India are non-electrified/

poor, erratic and unreliable supply and farmers depend on diesel pump-sets for irrigation

• Biofuels can help substitute a part of this

Environmental sustainability of biofuel• Environmental impacts of biofuels need to be

studied in detail• Experiments in India on biodiesel use in vehicles

have shown reduction in some important air pollutants

Issues/ Concerns

• Generation of new employment opportunities in raising, reaping and processing of biofuel crops

• Addition to the renewable energy options for decentralised distributed generation (DDG) of electricity and for motive power applications (water pumping, milling, etc.) in energy deficient rural India

• Greening of wastelands and regeneration of degraded forest-lands, thereby helping in ecorestoration and preventing further land degradation

• Better environmental performance through reduction in vehicular pollution and GHG emissions

• Biofuels in vehicles results in reduction of SO2, particulate matter, CO, etc.

Benefits of biofuel

Biofuel in India - Challenges

Produce large quantities of biofuels at prices competitive with fossil fuel products

• Deal with issue of land ownership. The land ceiling laws vary from state to state, for which resources need to be mobilized as per different kinds of farming.

• Putting in place the back-to-back arrangements from farmer to expeller to bio-diesel manufacturer to final consumers is necessary for the successful implementation of the bio-diesel policy.

• Financial viability of the biodiesel is yet to be proven. The varied experience in yield levels and crop management practices has led to hesitation for planting biofuel crops

Thank you !

Life cycle analysis for various fuels

Source: Central Pollution Control Board, GOI, 2002

Biodiesel: pilot trials and lab-scale experiments

• Daimler Chrysler carried out trials with 100% Jatropha biodiesel on Mercedes-Benz C220 CDI car during 2004. Central Salt and Marine Chemicals Research Institute (CSMCRI) supplied 1,200 litres of Jatropha biodiesel for the trials. Covered 6,000 km successfully with average mileage of 13.5 km/litre

• Trail by Indian railways on diesel locomotive using 5,000 litres of imported soybean biodiesel blends (B10, B20, B50, B100) during April-May 2004

• State Road Transport Corporations of Haryana, Gujarat, Andhra Pradesh and Indian vehicle manufacturers - Tata Motors, and Mahindra & Mahindra carrying out trials with biodiesel blends.

Bio-diesel emissions compared to conventional diesel

Emissions B100 B20

Regulated Emissions

Total Unburned Hydrocarbons -93% -30%

Carbon Monoxide -50% -20%

Particulate Matter -30% -22%

NOx +13% +2%

Non-Regulated Emissions

Sulphates -100% -20%*

Polyciclic Aromatic Hydrocarbons (PAH)** -80% -13%

NPAH (Nitrated PAHs)** -90% -50%***

Ozone Potential of Speciated HC -50% -10%

Life-Cycle Emissions

Carbon Dioxide (LCA) -80%

Sulphur Dioxide (LCA) -100%

Bioethanol Resourcs

Year

Area (000 ha)

Yield (t/ha)

1950-51

1,707 32.10

1960-61

2,415 45.50

1970-71

2,615 48.30

1980-81

2,667 57.80

1990-91

3,686 65.40

1995-96

4,147 67.80

2002-03

4,361 64.60

•Area under sugar cane production > 2.5 times since 1950-51• In recent years both area and yield stagnated

Source: Singh J P, 2004

• 1.77 billion litres ethanol produced in 2001-02; 70% (potable/ industrial use), balance 0.53 billion litres for fuel• Dependence on single source – sugarcane molasses. •Availability expected to increase as the alcohol beverage manufacturers (40-45% of molasses), shifting towards grain-based alcohol. • Commercial production of alternate crops, like sweet sorghum, Cellulose materials etc